Bharti Airtel Ltd Vs Commissioner of Customs (CESTAT Mumbai)
Conclusion: CESTAT observed that the products in question would be classifiable under CTH 85177090 and not CTH 85176290 based on HSN and the Departmental Circular could not run contrary to the Judicial Pronouncements.
Facts: In the said case, the appeal have been filed by the appellant is directed against order in appeal No. 32(Arshiya FTWZ)/2021(JNCH)/Appeals dated 22.06.2021 passed by the Commissioner of Customs (Appeals), Mumbai-II, Nhava Sheva. By the impugned order, the Commissioner (Appeals) held as follows:
“12. In view of above, I find that assessments of imported Antenna (Parts of telecommunication equipments) made by the OA by revising the claimed classification from CTH 8570 7090 to 85176290 in 51 Bills of Entry (mentioned in table above) are sustainable. Accordingly, I upheld the Speaking Order – Order-in-Original No. 65/2020-21/AC/NS-GEN/CAC/JNCH dated 12.05.2020 in respect of said 51 Bills of Entry.
13. The Appeal filed by M/s. Bharti Airtel rejected accordingly.”
In present facts of the case, the Appellant have filed 51 Bills of Entry for the clearance of the antenna for base station claiming classification under CTH 85177090. These Bills of Entry were reassessed without any speaking order as per Section 17(5) of the Custom Act, 1962 and the classification as claimed by the respondents was modified to 85176290.
The CESTAT after taking submissions of both sides into consideration observed that undisputedly both the sides agree that the same issue has been considered by the coordinate bench of CESTAT, in case of Reliance Jio Infocom [2019 (369) ELT 1713 (T-Mum)] and bench have decided the issue in favour of appellant. Further, it was observed that in the impugned Order the Ld. Commissioner (Appeals) have observed as under:
“11. Further, the appellant relied upon the decision of the Hon’ble CESTAT in the case of CC v Reliance Jioinfocom Ltd.-2019(369)ELT 1713 vide Order A/87015-87016 of 2019 dated 06.11.2019 where Hon’ble CESTAT held that Antenna are not Machines but only parts of Machines and therefore are classifiable under Taiff Heading No 85177090, In this regard, I find that the department has filed an appeal before Hon’ble Supreme Court against this judgment of Hon’ble Tribunal. Also, vide the para 13 of the impugned order the OA stated that CBEC has decided not to withdraw the circular which classify Antenna under sub heading 8517 62 90 even after H.S. Committee decision”.”
To the above, the Tribunal observed that distinction sought to be made is not based on any sound logic except by referring to the Board Circular. The approach of Commissioner (Appeal) is contrary to the decision of Hon’ble Supreme Court in case of Ratan Melting and wire Industries [2008 (231) ELT 22 (SC)], wherein it was observed that the Department Circulars are not binding upon the Courts.
The CESTAT while allowing the appeal of observed that the issue was again considered by the Tribunal in case of Reliance Jio Infocomm vide the order reported at [2022- TIOL-604-CESTAT-Mum] and the bench dismissed the appeals filed by revenue sating as follows:
“20. We also find that Hon’ble Apex Courts has dealt the issue of classification of parts in the case of N.I. Systems India P. Ltd. – 2010 (256) ELT 173 (SC) = 2010-TIOL-52-SC-CUS and held as under:-
“28. For the reason given hereinafter, we hold on the basis of technical material (including the importer’s own catalogue and webcast) that Controllers (including embedded controllers) are not merely PCs/ADPMs, but have a specialized structure and specific functions to perform and are therefore classifiable under Chapter 90.
29. Similarly, I.O. Modules and Chassis, which are the subject matter of import in this civil appeal are meant to operate as parts of industrial Process Control equipments like sensors. These I.O. Modules come with software tailored to their specific pre-defined functions. Therefore, one has to see the package in the holistic manner. The package as a whole both hardware and software- constitutes one single functional unit. Accordingly, we hold that I.O. Modules and Chassis are classified as parts and accessories of Automatic Regulating or Controlling Instrument/Apparatus under CTH 9032.90.00.”
30. In view of the above, we find that the Department could not support their contention. No technical literature was submitted; in spite of the fact that the imports have been taking place over a period of time. Learned Commissioner (Appeals) has been upholding the contention of the appellants. In one instance Revenue has accepted the order of Commissioner (Appeals). We find that the Department has not drawn any samples and did not obtain technical opinion to support their claim that the impugned goods are complete machines or equipment capable of independent function themselves so as to merit classification under CTH 85176270. On the contrary, the respondents could demonstrate by technical literature; samples and the ratio of judgments cited above that the goods imported by them are Populated Circuit Boards (PCBs) used in PSS 1830 and therefore, the impugned goods are parts of PSS and as such merit classification CTH 85177010. We also find that the appellants have submitted US Customs Rulings on the classification of the impugned goods, though they are not binding on us, they would certainly have a persuasive effect more so in the absence of any evidence to the contrary. In view of the discussion as above, and considering the fact that Commissioner (Appeals) has been consistent in rejecting the department’s claim, we are of the considered opinion that there is no merit in the appeals filed by the Department.”
Accordingly, the appeals were allowed.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal filed by the appellant is directed against order in appeal No. 32(Arshiya FTWZ)/2021(JNCH)/Appeals dated 22.06.2021 passed by the Commissioner of Customs (Appeals), Mumbai-II, Nhava Sheva. By the impugned order, the Commissioner (Appeals) held as follows:
“12. In view of above, I find that assessments of imported Antenna (Parts of telecommunication equipments) made by the OA by revising the claimed classification from CTH 8570 7090 to 85176290 in 51 Bills of Entry (mentioned in table above) are sustainable. Accordingly, I upheld the Speaking Order – Order-in-Original No. 65/2020-21/AC/NS-GEN/CAC/JNCH dated 12.05.2020 in respect of said 51 Bills of Entry.
13. The Appeal filed by M/s. Bharti Airtel rejected accordingly.”
2.1 M/s Bharti Airtel Ltd (Appellant) filed 51 Bills of Entry as detailed in table 1 below, for the clearance of the antenna for base station claiming classification under CTH 85177090. These Bills of Entry were reassessed without any speaking order as per Section 17(5) of the Custom Act, 1962 and the classification as claimed by the respondents was modified to 85176290.
